Correlation Between China Longyuan and Sino Wealth
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By analyzing existing cross correlation between China Longyuan Power and Sino Wealth Electronic, you can compare the effects of market volatilities on China Longyuan and Sino Wealth and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Longyuan with a short position of Sino Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Longyuan and Sino Wealth.
Diversification Opportunities for China Longyuan and Sino Wealth
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Sino is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding China Longyuan Power and Sino Wealth Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Wealth Electronic and China Longyuan is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Longyuan Power are associated (or correlated) with Sino Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Wealth Electronic has no effect on the direction of China Longyuan i.e., China Longyuan and Sino Wealth go up and down completely randomly.
Pair Corralation between China Longyuan and Sino Wealth
Assuming the 90 days trading horizon China Longyuan Power is expected to under-perform the Sino Wealth. But the stock apears to be less risky and, when comparing its historical volatility, China Longyuan Power is 1.86 times less risky than Sino Wealth. The stock trades about -0.02 of its potential returns per unit of risk. The Sino Wealth Electronic is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,453 in Sino Wealth Electronic on August 29, 2024 and sell it today you would lose (30.00) from holding Sino Wealth Electronic or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Longyuan Power vs. Sino Wealth Electronic
Performance |
| Timeline |
| China Longyuan Power |
| Sino Wealth Electronic |
China Longyuan and Sino Wealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Longyuan and Sino Wealth
The main advantage of trading using opposite China Longyuan and Sino Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Longyuan position performs unexpectedly, Sino Wealth can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sino Wealth will offset losses from the drop in Sino Wealth's long position.| China Longyuan vs. Sinomach General Machinery | China Longyuan vs. Zijin Mining Group | China Longyuan vs. Zhongshan Public Utilities | China Longyuan vs. Shenzhen Zhongzhuang Construction |
| Sino Wealth vs. Lutian Machinery Co | Sino Wealth vs. China Longyuan Power | Sino Wealth vs. Changshu Tongrun Auto | Sino Wealth vs. PetroChina Co Ltd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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